Question

With compound interest, a sum of money amounts to Rs. 1,452 in 2 years and Rs. 1,597.20 in 3 years. What is the rate of interest per annum?

• A. 9%
• B. 12%
• C. 10%
• D. None of these

Answer 1

Answer: (C)

10%

Suppose $principal=Rs.P$ and $rate=R$%
Given $A=Rs.1,450$ for $N=2$
$A=Rs.1,597.20$ for $N=3$
$\therefore P{(1+\frac{R}{100})}^2=1,452$
$P{(1+\frac{R}{100})}^3=1,597.20$
Dividing (2) by (1), we get
$1+\frac{R}{100}=\frac{1,597.20}{1,452}$
$\frac{R}{100}=\frac{1,597.20}{1,452}-1=\frac{145.20}{1,452}=10$%